Quarterly report pursuant to Section 13 or 15(d)

Real Estate and Intangible Assets (Tables)

v2.4.0.8
Real Estate and Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2013
Property Plant And Equipment [Abstract]  
Summary Information of Fourteen Farm Properties

The following table provides certain summary information about our 14 farm properties as of June 30, 2013.

 

Property Name

   Location    Date
Acquired
   Encumbrances     Gross  Cost
Basis(1)
     Number
of
Farms
     Number
of
Leases
     Farmable
Acres
     Total
Acres
     Lease
Expiration
Date

San Andreas

   Watsonville, CA    6/16/1997    $ 100,000 (2)    $ 4,929,307         1         1         237         306       12/31/2014

West Gonzales

   Oxnard, CA    9/15/1998      13,473,792        15,185,928         1         2         501         653       12/31/2013

West Beach

   Watsonville, CA    1/3/2011      5,068,800        8,472,073         3         1         195         198       10/31/2013

Dalton Lane

   Watsonville, CA    7/7/2011      2,587,853        2,808,000         1         1         70         72       10/31/2015

Keysville Road

   Plant City, FL    10/26/2011      1,152,000        1,230,758         2         1         50         59       7/1/2016

Colding Loop

   Wimauma, FL    8/9/2012      3,366,720        3,597,421         1         1         181         219       6/14/2018

Trapnell Road

   Plant City, FL    9/12/2012      3,840,000        4,000,000         3         1         110         124       6/30/2017

38th Avenue

   Covert, MI    4/5/2013      —          1,381,133         1         1         89         119       4/4/2020

Sequoia Street

   Brooks, OR    5/31/2013      —          3,201,019         1         1         206         209       5/31/2028
        

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
         $ 29,589,165      $ 44,805,639         14         10         1,639         1,959      
        

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

(1) 

Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets) plus subsequent improvements and other capitalized costs associated with the properties.

(2) 

Represents borrowings outstanding on our line of credit with MetLife as of June 30, 2013, under which the San Andreas Farm is pledgd as collateral.

Summary of Components of Investments in Real Estate

The following table sets forth the components of our investments in tangible real estate assets as of June 30, 2013, and December 31, 2012:

 

     As of
June 30, 2013
    As of
December 31, 2012
 

Real estate:

    

Land

   $ 33,965,058      $ 30,828,325   

Building

     1,640,615        1,311,027   

Cooler

     4,963,243        4,963,243   

Drain system

     3,307,591        2,576,373   

Horticulture

     447,035        —     
  

 

 

   

 

 

 

Real estate, gross

     44,323,542        39,678,968   

Accumulated depreciation

     (2,818,185     (2,535,084
  

 

 

   

 

 

 

Real estate, net

   $ 41,505,357      $ 37,143,884   
  

 

 

   

 

 

 
Summarized Information of Acquisition of Properties

During the six months ended June 30, 2013, we acquired two farms in two separate transactions, which are summarized in the table below. There were no properties acquired during the six months ended June 30, 2012.

 

Property

Name

  

Property
Location

   Acquisition
Date
     Total
Acreage
     Number
of
Farms
    

Crop

Grown

   Lease
Term
   Renewal
Options
     Total
Purchase
Price
     Acquisition
Expenses
    Annualized
Straight-
line
Rent(1)
 

38th Avenue

   Covert, MI      4/5/2013         119         1       Blueberries    7 Years      1 (7 years)       $ 1,341,000       $ 40,133 (2)    $ 87,286   

Sequoia Street

   Brooks, OR      5/31/2013         209         1       Blueberries    15 Years      3 (5 years each)         3,100,000         101,019 (2)      193,617   
        

 

 

    

 

 

             

 

 

    

 

 

   

 

 

 
           328         2                $ 4,441,000       $ 141,152      $ 280,903   
        

 

 

    

 

 

             

 

 

    

 

 

   

 

 

 

 

(1) 

Annualized straight-line amount is based on the minimum rental payments required per the lease.

(2) 

Transaction accounted for as an asset acquisition instead of a business combination under ASC 805; therefore, related costs associated with the acquisition were capitalized and included as part of the fair value allocation of the identifiable tangible assets acquired.

Fair Value of Acquired Assets and Liabilities Assumed Related to Properties Acquired

We determined the fair value of acquired assets and liabilities assumed related to the properties acquired during the six months ended June 30, 2013, to be as follows:

 

Property
Name

   Land      Building      Drain
System
     Horticulture(1)      Leasing
Commissions(2)
     Total
Purchase
Price
 

38th Avenue

   $ 647,431       $ 42,720       $ 240,105       $ 447,035       $ 3,842       $ 1,381,133   

Sequoia Street

     2,489,302         278,868         423,314         —           9,535         3,201,019   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 3,136,733       $ 321,588       $ 663,419       $ 447,035       $ 13,377       $ 4,582,152   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) 

Horticulture acquired on the 38th Avenue property consists of various types of high-bush variety blueberry bushes.

(2) 

None of the purchase price was allocated to any intangibles; leasing commissions above represent direct costs incurred in connection with originating new leases on the properties.

Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed

The weighted-average amortization period, in years, for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2013, is shown in the table below. There were no intangible assets acquired or liabilities assumed during the six months ended June 30, 2012.

 

Intangible Assets and Liabilities

   Six Months Ended
June 30, 2013
 

Leasing commissions

     13.7   
  

 

 

 

All intangible assets and liabilities

     13.7   
  

 

 

 
Future Operating Lease Payments from Tenants under Non-Cancelable Leases

Future operating lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2013 and each of the five succeeding fiscal years and thereafter as of June 30, 2013, are as follows:

 

Period

   Tenant Lease
Payments
 

For the remaining six months ending December 31:

   2013    $ 1,352,580   

For the fiscal years ending December 31:

   2014      1,237,200   
   2015      791,289   
   2016      752,580   
   2017      568,986   
   2018      280,232   
   Thereafter      2,060,236   
Value of Intangible Assets and Accumulated Amortization

The following table summarizes the carrying value of intangible assets and the accumulated amortization for each intangible asset class as of June 30, 2013, and December 31, 2012:

 

     June 30, 2013     December 31, 2012  
     Lease
Intangibles
     Accumulated
Amortization
    Lease
Intangibles
     Accumulated
Amortization
 

In-place leases

   $ 286,975       $ (220,717   $ 286,975       $ (186,843

Leasing commissions

     101,935         (24,067     63,638         (17,627

Customer relationships

     93,187         (45,214     93,187         (31,270
  

 

 

    

 

 

   

 

 

    

 

 

 
   $ 482,097       $ (289,998   $ 443,800       $ (235,740
  

 

 

    

 

 

   

 

 

    

 

 

 
Aggregate Amortization Expense

The aggregate amortization expense for the remainder of 2013 and each of the five succeeding fiscal years and thereafter is as follows:

 

Period

   Estimated
Amortization Expense
 

For the remaining six months ending December 31:

   2013    $ 22,852   

For the fiscal years ending December 31:

   2014      45,787   
   2015      43,585   
   2016      32,129   
   2017      20,519   
   2018      7,057   
   Thereafter      20,170   
Summary of Geographic Locations of Properties

The following table summarizes the geographic locations of our properties with leases in place as of June 30, 2013 and 2012:

 

     As of and For the Six Months Ended June 30, 2013     As of and For the Six Months Ended June 30, 2012  

State

   Number
of
Farms
     Number
of
Leases
     Total
Acres
     % of
Total
Acres
    Rental
Revenue
     % of Total
Rental
Revenue
    Number
of
Farms
     Number
of
Leases
     Total
Acres
     % of
Total
Acres
    Rental
Revenue
     % of Total
Rental
Revenue
 

California

     6         5         1,229         62.7   $ 1,591,082         85.3     6         5         1,229         95.4   $ 1,591,208         97.9

Florida

     6         3         402         20.5     236,271         12.7     2         1         59         4.6     34,167         2.1

Michigan

     1         1         119         6.1     20,851         1.1     0         0         0         0.0     —           0.0

Oregon

     1         1         209         10.7     16,135         0.9     0         0         0         0.0     —           0.0
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 
     14         10         1,959         100.0   $ 1,864,339         100.0     8         6         1,288         100.0   $ 1,625,375         100.0